Generally, real estate listings are posted on Multiple Listing Service (MLS) and are available to the general public. However, there are also what you call pocket listings in the real estate industry, which are not found on the MLS and are off-market. These exclusive real estate listings are only marketed to potential buyers through private listing networks that control who can see the information of the property.
Pocket listing refers to the real estate listing that is metaphorically in the pocket of the seller and agent alone. It is not made fully public and there is no agreement to work with other real estate professionals. The agent who is in charge with the selling of the property is then entitled to the full commission when it is sold.
Hence, here are some important things you need to know about pocket listings:
One of the primary advantages of pocket listings is privacy. In fact, there are a number of clients who are not fond of having strangers wander through their home and just want to keep a low profile on the sale of their property. Since the listing is not listed on the MLS, only those people who are involved need to know about it. More so, this helps in finding a serious buyer, minimizing exposure to strangers, and eliminating onlookers who are simply interested in seeing an expensive property.
Lower fees and expenses
There are various cost benefits when it comes to pocket listings. For sellers, their properties are being sold for the full price since they are listed in a focused, defined market. You don’t have to spend a huge amount of money on physical or virtual staging to advertise the property. In addition, agents may agree to take a reduced commission on pocket listings.
A great way to test the market
In case you are not sure if you really want to sell your property or for how much, then having pocket listings are a great way to test the market and see if there are buyers willing to purchase your home. These also let you get an idea if the listing can generate interest at your ideal asking price before putting it on the MLS and marketing it to the masses. Thus, you can prevent mispricing your property and have an opportunity to experiment with various price points without any repercussions.
Without MLS listings, fewer people will have a shot at making a deal on a pocket listing. This means that the property might not reach the same competitive pricing as it would in biddings. The real estate professional is the only one acting for the property, hence, if there is no seller found or a deal falls through, then the property does not have visibility on the market. Moreover, MLS is a larger market, so there are more buyers willing to use it. The lack of exposure may limit the variety of buyer types and at the same time cause a longer sale than what you desired.
Lack of photos and detailed information
Having a pocket listing means all the information you need won’t be easily available online. Potential buyers need to personally visit the home or talk to the designated agent first without seeing the listing online. This means that buyers won’t have the chance to review the details about the property after checking it out. You might save money on real estate photo service, but this could also be a disadvantage on your end.
Longer sale of the property
It may take more time to sell your property when you opt for pocket listings. Since you won’t be getting the maximum exposure offered on the open market, you may have to wait a little longer to find a buyer who is willing to pay your asking price, unlike the MLS where you can have a wide range of potential buyers who might be interested in your home and can seal a deal in no time. However, if you are not in the rush to have your property sold right away, then there won’t be a problem.
Potential fair housing violations
This might be the biggest downside of pocket listings. Sellers need to be aware that when they choose pocket listings, there might be significant consequences. If only one real estate agent markets a property to certain buyers, it can be difficult to know if they are violating fair housing laws by excluding people from checking out their home on purpose or unintentionally. Also, this could be interpreted as discriminatory.
Indeed, a pocket listing has its own benefits and downsides. Depending on your needs and preferences, this kind of listing can still give you the opportunity to sell a property. Just make sure to understand and review the things mentioned above to ensure that you know more about pocket listings.